Latest / The Art of Adjusting® Podcast / Episode 91: How To Adjust Frozen Pipe Losses Without Missing Coverage

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Episode 91: How To Adjust Frozen Pipe Losses Without Missing Coverage · The Art of Adjusting® Podcast

• 0:06
  William Auten: Hello, I'm Bill Auten of Auten Claims Management.
• 0:09
  Chantal Roberts: I'm Chantal Roberts of CMR Consulting, and welcome to the Art of Adjusting Podcast.
• 0:14
  William Auten: Today we're going to talk about life as an insurance adjuster from the perspective of property, auto, liability, or workers' compensation adjusters.
• 0:22
  William Auten: Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster.
• 0:31
  William Auten: Hey Chantal, how are you today?
• 0:33
  Chantal Roberts: I'm doing well.
• 0:34
  Chantal Roberts: Thank you.
• 0:34
  Chantal Roberts: How are you?
• 0:36
  William Auten: Pretty good.
• 0:36
  William Auten: Pretty good.
• 0:37
  William Auten: Uh we're on the cusp of spring.
• 0:39
  William Auten: Well, spring has happened.
• 0:41
  William Auten: Uh uh by the time this airs, spring will be almost a week old.
• 0:46
  Chantal Roberts: So do y'all have the uh you know, first spring or or you start off with like fake spring and then you go back to winter, and then you go to first spring and then back to winter and then second spring.
• 0:59
  Chantal Roberts: Do y'all have that going back and forth?
• 1:01
  Chantal Roberts: Like I don't know, in one day.
• 1:03
  William Auten: We not it not really in one day.
• 1:06
  William Auten: I mean, the temperature changed like 30 degrees in one day last week.
• 1:10
  Chantal Roberts: Okay, it did go too.
• 1:12
  William Auten: Yeah, so that that kind of thing happens.
• 1:15
  William Auten: Um, it's certainly not on a schedule.
• 1:17
  William Auten: It's not like, okay, second week of March, we're gonna have early spring, and then third week of March, it goes back to winter.
• 1:23
  William Auten: It's a crapshoot.
• 1:24
  William Auten: You might have an entire March where it's in the 60s and 70s.
• 1:28
  William Auten: That's very rare.
• 1:30
  William Auten: Um, most cases you'll have mostly winter in March with a break, a surprise break here or there somewhere.
• 1:40
  William Auten: But uh by this time, everybody is mentally challenged.
• 1:44
  William Auten: They're all losing their minds waiting for the sun to shine.
• 1:48
  William Auten: Rochester is a very cloudy city.
• 1:51
  Chantal Roberts: I would insert that anybody living in the north would be mentally challenged to begin with because it's freaking cold there.
• 2:00
  William Auten: Um mentally challenged probably wasn't the right choice of words.
• 2:04
  Chantal Roberts: Especially to me.
• 2:06
  Chantal Roberts: Okay.
• 2:06
  Chantal Roberts: But you know what?
• 2:07
  Chantal Roberts: I'm super excited.
• 2:08
  Chantal Roberts: Uh, this is actually our last topic about the winter.
• 2:13
  Chantal Roberts: And so now we can actually start looking forward to spring because we're going to be talking about frozen pipe claims.
• 2:22
  Chantal Roberts: And I just posted on LinkedIn a little video that I did where the, and we talked about this a couple of weeks ago, where my outside pipe had frozen solid.
• 2:36
  Chantal Roberts: And then the water that the sump pump was trying to get out, what came back, exploded the sump pump cover everywhere, and uh the pipes came undone.
• 2:49
  Chantal Roberts: And so that was a lot of fun.
• 2:50
  Chantal Roberts: It was, it was a lot of fun.
• 2:52
  Chantal Roberts: It wasn't necessarily a frozen pipe claim, so we couldn't turn it in for homeowners, but yeah, I've had a little experience.
• 3:02
  Chantal Roberts: Uh, you can go to my LinkedIn and and check out that that nice little video I put together.
• 3:09
  William Auten: That's uh an unusual way to have a freeze damage claim.
• 3:13
  William Auten: Most times the supply lines are the ones that freeze, and what you're talking about is a discharge line or uh almost like a drain line that had frozen and and got blocked up.
• 3:23
  Chantal Roberts: Yeah.
• 3:24
  William Auten: Um and uh yeah, so uh where where do we start here?
• 3:30
  Chantal Roberts: Um Well, there's places where in the coverage that adjusters get tripped up, and uh I figured we would be talking about that today.
• 3:39
  William Auten: Sure.
• 3:39
  William Auten: Yeah, one of the things I I had teased in the last episode um was one of the most common mistakes I see when evaluating um a freeze damage claim.
• 3:51
  William Auten: And so adjusters are used to seeing uh claims involving accidental discharge from a pipe, and that's when a pipe fails, usually due to corrosion and it's inside a wall or inside a ceiling or something, and it leaks and causes damage to the surrounding building, drywall, floors, whatever.
• 4:10
  William Auten: And uh that accidental discharge peril in an HO3 has a um kind of an exception.
• 4:17
  William Auten: They'll pay for the damage from the water, but they won't pay for the repair to the pipe.
• 4:22
  William Auten: And typically that's because the pipe has worn out and wear and tear is generally not covered.
• 4:28
  William Auten: So it says right in there that we'll pay for the resulting damage, but we'll not pay for the plumbing repair.
• 4:33
  William Auten: So adjusters are used to doing their estimate for the drywall, the flooring, whatever.
• 4:39
  William Auten: And then uh there'll be a plumber's repair um invoice, and they'll attach that at the estimate.
• 4:46
  William Auten: I'm talking about independent adjusters now, by the way, when when reporting to a carrier, and they'll attach that invoice and just submit it for carrier consideration, um, recognizing that that repair typically is not covered.
• 4:59
  William Auten: Now, that's fine during the summer months and the fall and the and spring, but when you get into the winter months and you start seeing damage from frozen pipes where the pipe freezes, the pipe breaks open because the ice expands inside it and it bursts the pipe.
• 5:16
  William Auten: And then water damage results from that.
• 5:19
  William Auten: The adjuster, what I've seen adjusters do is take the same approach.
• 5:23
  William Auten: Well, this is a leak from a pipe, so we're not going to pay for the repair to the pipe.
• 5:27
  William Auten: However, um, this is um the damage to the pipe here was caused by freezing, and freezing is a covered peril, and it's different than an accidental discharge claim.
• 5:38
  William Auten: So you would pay for freeze damage to the pipe and the resulting water damage.
• 5:43
  William Auten: Um, and that's the that's the trip-up that I see the most common um on these types of claims.
• 5:51
  Chantal Roberts: Right.
• 5:51
  Chantal Roberts: But it would not be covered if it was, let's just say, a commercial policy then.
• 5:57
  Chantal Roberts: The frozen pipe.
• 6:00
  William Auten: A commercial policy.
• 6:02
  William Auten: Why wouldn't it be covered?
• 6:03
  William Auten: A pair of freeze.
• 6:03
  William Auten: I don't know.
• 6:04
  Chantal Roberts: That's how I'm I'm carrying on the conversation.
• 6:07
  William Auten: Oh, the the uh yeah, so um you can tell we rehearse this.
• 6:11
  William Auten: Yeah.
• 6:12
  William Auten: You took me by surprise with the question as well.
• 6:17
  William Auten: Um, but uh yeah, freeze is a covered peril on a commercial policy too.
• 6:21
  William Auten: So uh same, same deal.
• 6:23
  William Auten: Um, you would have the now that I don't know how the exception reads on an accidental discharge on a commercial.
• 6:32
  William Auten: I haven't looked at it in a while.
• 6:33
  Chantal Roberts: I believe it reads mostly the same, where if it's uh a broken pipe or sudden and accidental, we as the insurance carrier don't pay for that, except there, and then there's the exception to the exclusion.
• 6:47
  Chantal Roberts: Um, now of course, with both the homeowners and and the commercial property policies, you will get into this thing of quote, if you do everything possible or within your power to maintain heat in property.
• 7:08
  William Auten: A reasonable effort, yeah, a reasonable effort to to maintain heat in the property, right?
• 7:13
  Chantal Roberts: And then the question becomes well, what is reasonable?
• 7:19
  Chantal Roberts: And what do you because if the insured thinks that they've done that, is that reasonable?
• 7:28
  Chantal Roberts: Uh sure.
• 7:29
  William Auten: So so if you're gonna go away on vacation and you don't want to uh you don't want to incur the cost of heating your house like you would if you're living there, and you decide to turn the heat down to maybe 55 degrees, uh logic dictates that 55 degrees is above the freezing point, so you should be good, except for the fact that you've got this one room, uh bathroom on the one end of the house where there's um you know it's really far from the furnace, and the the air doesn't really get into that room as much as a normal.
• 8:01
  William Auten: Um and you could then it could get cold enough in that room, then especially if the wind's blowing the right direction and the temperature's the right, you know, below freezing uh or below zero, um, you run the risk of that room freezing.
• 8:21
  William Auten: Now, what's reasonable is it reasonable to set that at 55 and expect that everything's gonna be okay.
• 8:27
  William Auten: That's a judgment call for the carrier, I guess.
• 8:30
  William Auten: Now, if you turn the the heat off while you're on vacation in the middle of winter and you live in a uh cold climate, uh that's not reasonable.
• 8:40
  Chantal Roberts: That's like your like your son, which we which we um featured on an advertisement for LinkedIn with.
• 8:48
  William Auten: Yes, yes.
• 8:48
  William Auten: Sorry, Ben.
• 8:49
  William Auten: We had to bring your story into but it was such a great story, Ben.
• 8:53
  Chantal Roberts: So thank you.
• 8:54
  Chantal Roberts: So thank you.
• 8:55
  Chantal Roberts: We appreciate it.
• 8:56
  Chantal Roberts: We really do.
• 8:57
  Chantal Roberts: Love you, mean it.
• 8:58
  Chantal Roberts: Bye.
• 9:00
  William Auten: Blessed Lord.
• 9:02
  Chantal Roberts: So, but yeah, that that is that is the thing.
• 9:04
  Chantal Roberts: And of course, we got to go back to, as I always ask my students, what is a reasonable person?
• 9:11
  Chantal Roberts: And the answer is, okay, well, that would be a jury.
• 9:15
  Chantal Roberts: That would be people, your your peers.
• 9:18
  Chantal Roberts: So while an insurance carrier or an adjuster can go, oh, you know what, I think 55 is probably like the lowest I would go.
• 9:28
  Chantal Roberts: And and I've said 55 before.
• 9:31
  Chantal Roberts: Uh, and I've had my field adjusters, such as you, go take a picture of the thermostat.
• 9:38
  Chantal Roberts: Uh, although sometimes it has already been reset by that point.
• 9:43
  William Auten: Yeah, that that's not really evidence um necessarily.
• 9:47
  Chantal Roberts: True.
• 9:48
  Chantal Roberts: But I uh but I have asked, by the way, adjusters, I have asked for electric bills or gas bills or whatever, however, they heat their home.
• 9:58
  Chantal Roberts: So I could see the dip in in electric usage or gas usage or whatever.
• 10:05
  William Auten: Right.
• 10:06
  William Auten: And we've had many claims where a policy holder will say, um, the, you know, they've been away from the property, but look, I paid um the fuel company to deliver propane on a regular basis and they forgot and they just didn't show up and I didn't know.
• 10:23
  William Auten: And then you call the fuel company and they say, we didn't forget, they didn't pay their bill.
• 10:29
  William Auten: Um, so is that reasonable or unreasonable?
• 10:32
  William Auten: Uh no, I would say not paying your utility bill is unreasonable.
• 10:37
  Chantal Roberts: Is unreasonable, yes.
• 10:38
  Chantal Roberts: And unfortunately, you would get a denial by the insurance company, even though I think that your pipe would freeze.
• 10:46
  Chantal Roberts: Would you hold on?
• 10:47
  Chantal Roberts: I got to think about this.
• 10:48
  Chantal Roberts: Um well, you didn't keep your heat on.
• 10:52
  Chantal Roberts: So, yes, you would get denied by your insurance company because you failed to keep heat on, even though freezing is a covered cause of loss.
• 11:00
  Chantal Roberts: And isn't insurance fun?
• 11:02
  Chantal Roberts: I love insurance, these little brain teasers that we carry.
• 11:06
  Chantal Roberts: I don't know why more people aren't in insurance.
• 11:09
  Chantal Roberts: I think we have a selling problem or marketing problem personally, but uh that's a whole nother podcast.
• 11:16
  William Auten: Anyway, yes, it is super fun.
• 11:18
  Chantal Roberts: It is super fun.
• 11:20
  William Auten: It's it's a lot of complexity and um if you like solving it's like a puzzle.
• 11:25
  William Auten: Yeah, it's a puzzle.
• 11:26
  Chantal Roberts: Oh my god, it's like this, Bill.
• 11:28
  Chantal Roberts: We're we're looking, see, we're like I'm in Kansas, he's in New York, we're on the same wavelength.
• 11:35
  Chantal Roberts: It's crazy.
• 11:37
  William Auten: It is crazy.
• 11:38
  Chantal Roberts: Okay, so anywho, um we're talking about how we prove this and what kind of documentation we should be looking for.
• 11:47
  Chantal Roberts: I had said, you know, gas bills or electric bills or the propane bills or or something to that effect.
• 11:54
  Chantal Roberts: Anything else that you can think of?
• 11:57
  William Auten: As far as proving that they took reasonable steps to maintain heat.
• 12:01
  William Auten: Well, um, they might have the heat on, but uh they left the window open or they um, you know, didn't make a repair.
• 12:11
  William Auten: We've had cases where we've had a um a walkout basement and someone left the door open and the wind came in and it froze all the pipes in the basement.
• 12:21
  William Auten: The heat was on upstairs, uh, but downstairs in the basement, and you know, it was just in one end.
• 12:27
  William Auten: You know, a home is a kind of a a building, any kind of building is kind of a dynamic structure insofar as the the air inside it is going to be different in some areas than than others.
• 12:39
  William Auten: It uh it's gonna be different temperatures, and um the heating system is going to work more effectively in some areas than others.
• 12:48
  William Auten: We have a wood stove in our house in addition to a steam boiler.
• 12:52
  William Auten: Um when the boiler's running, the heat is pretty well distributed throughout the house.
• 12:57
  William Auten: But if we're relying on just the wood stove, the only room that's really warm is the living room and a few rooms around it.
• 13:04
  William Auten: Um the other end of the house gets very cold if we were to leave the heat completely off.
• 13:09
  William Auten: So um, you know, knowing your house and knowing the dynamics of where the cold spots are is important.
• 13:17
  William Auten: Does that does that get into the realm of what is reasonable and what is not?
• 13:22
  William Auten: And that's a judgment call, you know.
• 13:25
  Chantal Roberts: Well, I I I think this is when the adjuster, and we don't hear this a lot for property losses per se, but but a frozen pipe might be an excellent time to take that recorded statement of your insured, because this is the time to ask your insured, okay, which room actually gets a little cold.
• 13:48
  Chantal Roberts: So for example, uh when you and your wife, your lovely bride, come and visit Aaron and me for our barbecue tour or whatever, uh, we uh are gonna put you up in the French room, in the fancy guest room, La Tida.
• 14:06
  Chantal Roberts: And yeah, that room in the winter, super cold, super cold.
• 14:13
  Chantal Roberts: In the summer, it gets a little warm because it's west facing facing.
• 14:17
  Chantal Roberts: So if I had a frozen pipe over there, I would, as the adjuster, I would want to talk to the injured, like, hey, what what temperature is that room?
• 14:30
  Chantal Roberts: Yeah, you set your house for let's say 65, and you had someone coming over and watering your plants, making sure that things were dripping or you know, turning on the faucets to drip if it happened to get really cold overnight or whatever, but what's the temperature in that room?
• 14:47
  Chantal Roberts: Right.
• 14:48
  Chantal Roberts: And and so in this particular instance, we normally don't take recorded statements for property damage, but this might be one where we'd want to.
• 14:59
  William Auten: I would say that if there's a suspicion of coverage of a coverage issue, um whether it's the reasonableness of knowing the cold spots in your house, which I regard as kind of a thin um basis to issue a coverage disclaimer on a freeze claim.
• 15:17
  William Auten: But um more importantly, if it's an issue of over maintaining heat and a dispute over fuel bills and who told who what and when to show up and all that kind of stuff, um, that might be a good opportunity to take a statement or a good time to, you know, document the insured's uh position on things because what they tell you in that statement, you know, we don't take statements as a gotcha.
• 15:43
  William Auten: Uh very true attorneys attorneys blame us for taking statements because we just want to uh trick somebody into saying something that's gonna uh hurt their claim.
• 15:52
  William Auten: Um rather we look at it as a way to get the facts uh memorialized so that nobody can change your story later one way or the other.
• 16:01
  William Auten: Right.
• 16:01
  William Auten: Um Right.
• 16:03
  Chantal Roberts: And I actually talked about that in a expert case that I had where I had said, you know, it's it's best practice that a field adjuster would go inside and take photos of the inside of the ceiling showing no leaking, no damage, or getting into the attic showing no leaking, no damage.
• 16:30
  Chantal Roberts: But it's not standard.
• 16:33
  Chantal Roberts: And of course, best practices is a little bit higher of a bar than what standard is.
• 16:38
  Chantal Roberts: And it's only after we get nailed in a lawsuit, and it's because our field adjuster did not take these photographs and we've had damage creep or something to that effect.
• 16:50
  Chantal Roberts: And this is slightly off topic, but this is the reason why we now do that, or at least we did at my company, is we were we said, Yeah, I know that it's all on the outside, but do us a favor and get in the attic and take a picture, and then go into every single room and take a picture, even if it's a wide lens, but make sure that we can see the ceiling.
• 17:11
  Chantal Roberts: So we don't have that kind of damage creep.
• 17:14
  Chantal Roberts: And the and the reason is is that we would see, okay, we didn't have that leak on this date, but then we had another storm, and now we have a leak, whatever, but the same difference here.
• 17:25
  Chantal Roberts: And also about the you were saying the the coldness areas, I was thinking particularly when you when you mentioned that, I have a spot, it's under my sink, and I think that that we don't have enough insulation in that area.
• 17:42
  Chantal Roberts: So when Kansas City or the Midwest had that really cold snap a couple months ago, I actually bought some styrofoam insulation and put it up against that bar wall.
• 17:59
  Chantal Roberts: It doesn't really help the pipe, but of course I left the the paper faucet leaking, and then I opened the door so that whole cavity now can be warmer because I've put the insulation up.
• 18:12
  William Auten: Yeah, uh letting the faucets drip, uh just cracking them open just a little bit at night when you know you've got extreme cold conditions outside uh can help to prevent um you know freezing and blockage of pipes.
• 18:25
  William Auten: It's not the it's not the end-all be-all.
• 18:28
  William Auten: If it gets cold enough that stuff's gonna freeze anyway, but um that is one trick and keeping the cabinet doors open is is not a bad idea either, especially when you know um the pipes are on an outside wall and uh uh the there's a risk of freezing there.
• 18:45
  Chantal Roberts: I do it on all my outside walls.
• 18:47
  Chantal Roberts: And in fact, for for us southerners who aren't used to having these kinds of really cold extended days, I did look it up and and because of course my husband's from Iowa, and he's like, eh, no, we don't need to leave it dripping.
• 19:04
  Chantal Roberts: Yeah, it's fine.
• 19:05
  Chantal Roberts: And I'm like, oh my God.
• 19:07
  William Auten: He's probably right.
• 19:09
  Chantal Roberts: He's probably right, and he's an insurance adjuster too, as everyone knows.
• 19:13
  Chantal Roberts: And I sit there and go, oh my gosh, but I can't deal with an insurance adjuster because you know how we are.
• 19:18
  Chantal Roberts: So anyway.
• 19:22
  William Auten: Well, when it comes to prevention, um, there's there's one thing that I tell everybody that if you're going away, um, there's a couple things that you should do to your house uh while you're away.
• 19:34
  William Auten: One, make sure that any fuel deliveries that you have are on schedule and that they're going to happen.
• 19:41
  William Auten: So if you have, you know, propane on site or fuel oil on site, make sure those are topped off.
• 19:47
  William Auten: Uh, if you've got gas from the street, then um probably not too much of a worry there.
• 19:52
  William Auten: But um but the biggest thing you could do, the best thing you could do is just turn the water off because if your pipes freeze, um, if for some reason there's a failure of the heating system and the pipes do freeze, you're not gonna damage the whole house with a flood as on top of the freeze damage.
• 20:11
  William Auten: You're just gonna have some pipes that have burst, and those repairs are actually not that expensive as compared to a house that um where the water is left running uh through broken pipes for a week and a half or two weeks or wherever however long it is that you're gone.
• 20:28
  William Auten: Um that can cause a lot of damage.
• 20:32
  Chantal Roberts: Yeah, and you mentioned uh someone leaving a window open and that and that uh caused me to remember something.
• 20:39
  Chantal Roberts: My neighbors texted me and said, Hey, by the way, we're gonna be gone for spring break, and uh the daughter's boyfriend will be staying at our house, you know, watching the dogs and and that sort of thing over the week that we're gone.
• 20:55
  Chantal Roberts: So, in case you see some strange kid, and I'm like, okay, we will grill him down in the basement, you know, slap him around a bit, find out whatever you want to know.
• 21:03
  Chantal Roberts: And she said thanks.
• 21:05
  Chantal Roberts: And I noticed again, we are going through our false spring dying of winter in here in the Midwest.
• 21:14
  Chantal Roberts: And so Monday it was 32-ish, 30-ish, and it snowed.
• 21:21
  Chantal Roberts: And so now today, yesterday it was 80, the day before 75.
• 21:28
  Chantal Roberts: Uh Saturday, it's supposed to be 90.
• 21:30
  Chantal Roberts: Woo-hoo! I'm super pumped.
• 21:33
  Chantal Roberts: I hate winter, as everybody knows.
• 21:35
  Chantal Roberts: Anyway, I our bathroom overlooks their yard.
• 21:39
  Chantal Roberts: And so I was looking at their house and saw that a window was cracked open.
• 21:48
  Chantal Roberts: And it reminded me of what you just said.
• 21:50
  Chantal Roberts: It it triggered that.
• 21:52
  Chantal Roberts: And and so maybe when as an adjuster, you're talking to the insured, you go, hey, Did a neighbor keep watch over the house, you know, even from the outside, get that name a number, maybe talk to that person, because I did think about texting my neighbor and saying, Hey, I think you have a window open.
• 22:14
  Chantal Roberts: I can't I can't tell, but I I can see that it that the the sill and the you know bar is is apart, but I don't know if they have like you know storm windows on or whatever.
• 22:26
  William Auten: Anyway, something that's yeah, having somebody having somebody to check in your property is is super important.
• 22:32
  William Auten: Um there's automation too.
• 22:34
  William Auten: I mean, we use um we have a uh a little thermometer in the house that communicates with the Wi-Fi, and I can monitor the temperature of my house from anybody anywhere in the world.
• 22:46
  William Auten: Um we have that's that's kind of handy.
• 22:50
  Chantal Roberts: Um that's the really super cool, and we should get them as sponsors.
• 22:54
  Chantal Roberts: The the water notification things that we've talked about before.
• 23:00
  Chantal Roberts: Yeah, yes.
• 23:01
  William Auten: In fact, the ther the thermometer that we have is made by the same folks, uh, so I can monitor those water um sensors and the temperature uh on the same app.
• 23:12
  William Auten: Because we have such an antiquated heating system, we can't use one of the fancy new programmable um thermostats that can communicate that way.
• 23:23
  William Auten: But um, you know, there's a lot of those available today for modern systems.
• 23:28
  William Auten: Uh, we just live in a really old house.
• 23:31
  Chantal Roberts: So yeah.
• 23:32
  Chantal Roberts: Um sometimes those things spit out a little blurb or whatever.
• 23:37
  Chantal Roberts: For example, I know when I was working alarm or burglaries, you know, thefts, uh, the insured had to keep a or had to have a burglar alarm that reported to a central station or something to that effect, and it would have that open close notification.
• 23:55
  Chantal Roberts: I would ask the insured to print off that open close report, you know, when they turned on the alarm, when they turned it off, that kind of deal.
• 24:05
  Chantal Roberts: And so these uh temperature things may have a little report to be able to give you as adjusters that you could get.
• 24:16
  William Auten: Yeah.
• 24:16
  William Auten: Um mine, I don't know if you can see it here, but you can see a historical uh readout.
• 24:23
  Chantal Roberts: Uh you can't see it, but uh but that's okay.
• 24:26
  Chantal Roberts: See, this is why you should really watch the YouTube version rather than listening to Bill and my's great voice as we talk about yacht rock.
• 24:35
  Chantal Roberts: The salty sounds, yes, the salty sounds of adjusting on yacht rock radio.
• 24:43
  Chantal Roberts: Okay, anyway, that's gonna be an advertisement.
• 24:47
  William Auten: I guess so.
• 24:48
  William Auten: Uh let's see, what else we should we talk about here?
• 24:51
  William Auten: Um okay.
• 24:53
  Chantal Roberts: So what about if we have extreme cases of week, uh, you know, weeks of like we're going going through right now, you know, freezing, thawing, freezing, thawing, uh, which we've done here in in the Midwest right now.
• 25:06
  William Auten: So um, yeah, ours hasn't been as extreme as as yours, but we've gone from um you know 15 to 16 degrees temperatures up into the 30s and 40s.
• 25:19
  William Auten: Um, and that can make a pretty big difference.
• 25:22
  William Auten: Um, but uh when it comes to to severity, you you could have a very minor freeze where you've got uh one pipe on an outside wall in an occupied house that froze overnight with no one knew, and then the next morning they woke up and there's some water coming from a weird spot that just you know uh didn't make any sense.
• 25:42
  William Auten: And and you can have, you know, probably less than $2,000 in damage by the time you're done there, versus a uh similar case where the same spot freezes, but they're gone for two weeks, and then you've got water running down the staircase and freezing, and you go into a property and there's columns of ice from floor to ceiling.
• 26:02
  William Auten: Um just yeah, and um and those claims can be very complicated because you may get the call when they just discovered it and it's still 15 degrees in the house, and you go there and everything is just covered in ice, and you can't even see what needs to be repaired because it's just covered in I want photographs of that.
• 26:28
  William Auten: Oh, I have many I can probably send you.
• 26:30
  Chantal Roberts: Okay, um, we're not gonna be able to share them because of confidentiality and all that kind of stuff.
• 26:35
  William Auten: Sorry, yeah, yeah.
• 26:35
  William Auten: I bet you if you hopped on Google, you could find some uh that that have been published by people who have experienced homeowners who've experienced that.
• 26:45
  William Auten: But um, I've been in homes where the staircase is looks like a luge.
• 26:50
  William Auten: Uh it's just complete the water just ran down the stairs and froze as it went.
• 26:56
  William Auten: Um, the column of ice.
• 26:58
  William Auten: I I have been in a basement where there was a column of ice that was like a four-foot tree trunk from the basement floor to the floor joys.
• 27:06
  William Auten: Wow.
• 27:07
  William Auten: Um, and every toilet in the place is cracked.
• 27:10
  William Auten: And yeah, yeah, yeah.
• 27:11
  William Auten: So when you get into a place like that, you you can assess, you can try and assess the damage as best you can, but you're not really going to know what is damaged until it all thaws out.
• 27:22
  Chantal Roberts: Okay, so this is a good point, if I can interrupt you real quick.
• 27:25
  Chantal Roberts: So here's here's the advice that I would talk to the adjusters about when they when either they get the report back from their field adjusters or they're out there writing the estimate right now.
• 27:37
  Chantal Roberts: We've got insureds who may be represented by public adjusters, and then those public adjusters should should know and be able to converse with the homeowners.
• 27:47
  Chantal Roberts: But let's say that we have unrepresented homeowners.
• 27:51
  Chantal Roberts: This is when you, as an adjuster, will need to say, hey, I've got this estimate.
• 27:56
  Chantal Roberts: We've written it as best as we can right now.
• 27:59
  Chantal Roberts: You are going to have a supplement.
• 28:01
  Chantal Roberts: You are.
• 28:03
  Chantal Roberts: I mean, just point blank, period.
• 28:05
  Chantal Roberts: So I'm going to give you money right now based off of the damage that we can see.
• 28:10
  Chantal Roberts: Give this to your contractor, have them contact us once everything gets, you know, thought out.
• 28:16
  Chantal Roberts: And of course, once everything gets thought out, we're going to have to send remediators out there to sop up the water and what have you.
• 28:22
  Chantal Roberts: But the reason I tell you as adjusters this is because if we don't let the insureds know that there's going to be a supplement, they are going to think this is the only thing they have coming to them.
• 28:37
  Chantal Roberts: Trust me, I have seen this in lawsuits where where and this is also the kind of thing where I see homeowners not wanting to begin repairs until all of the damage is estimated.
• 28:55
  Chantal Roberts: And it's and it's almost counterintuitive.
• 28:59
  Chantal Roberts: Like we we won't know what the damage is until we finish with the claim.
• 29:03
  Chantal Roberts: Right.
• 29:03
  Chantal Roberts: And and so you kind of have to trust the process.
• 29:07
  Chantal Roberts: So, as adjusters, I am going to tell you this is the easiest way for you to do this is to go, here's your first estimate.
• 29:16
  Chantal Roberts: This is just what we have written.
• 29:18
  Chantal Roberts: It's going to thaw.
• 29:19
  Chantal Roberts: We're going to thaw it out.
• 29:20
  Chantal Roberts: You're going to thaw it out.
• 29:21
  Chantal Roberts: Someone's going to thaw it out.
• 29:22
  Chantal Roberts: Nature will thaw it out.
• 29:23
  Chantal Roberts: I have no idea.
• 29:24
  Chantal Roberts: And then we're going to come back and write another estimate, and you're going to get more money.
• 29:28
  Chantal Roberts: Sorry to interrupt.
• 29:30
  Chantal Roberts: I just wanted to.
• 29:31
  William Auten: No, that's exactly what it that's exactly how you handle these.
• 29:34
  William Auten: When uh when you you you can't always know that the well, here's another, this is not a freeze damage situation, but we've we have a lot of claims involving ice dams.
• 29:45
  William Auten: And um when the roof leaks, people automatically assume there's damage to the roof.
• 29:50
  William Auten: And there might be.
• 29:50
  William Auten: Chances are there isn't in an ice dam claim, but there might be.
• 29:54
  William Auten: And if there's eight inches of snow on the roof, we can't assess the damage to the roof, but we certainly can assess the damage to the interior.
• 30:02
  William Auten: So go ahead, write that estimate.
• 30:03
  William Auten: Uh, get that piece of the claim settled, and then um when the snow melts, reopen the claim, go out there and assess the roof and see if there's any roof damage.
• 30:14
  William Auten: That's the that's the way to handle that.
• 30:17
  Chantal Roberts: Absolutely.
• 30:17
  Chantal Roberts: Yeah, so let's shift to uh liability.
• 30:22
  Chantal Roberts: What happens if there's a tenant?
• 30:25
  Chantal Roberts: Now I've got a great story about a tenant, and this was a this is a commercial property case that I handled as an expert witness, and I actually like to use it as a case study sometimes.
• 30:40
  Chantal Roberts: So what happens when there is a tenant who maybe turns off the heat or turns it down really low or something to that effect?
• 30:51
  William Auten: What happens?
• 30:52
  William Auten: So if if uh if it gets cold enough to freeze the pipes, then the pipes may burst and cause water damage, and then the property owner will call his insurance company and make a claim.
• 31:04
  William Auten: Um now he could make a claim through the tenant, and he could say, you have to pay for this damage now.
• 31:11
  William Auten: That might be a long road to go.
• 31:13
  William Auten: Uh, so you're better off um calling your own insurance company, and you'll have potentially replacement cost coverage that you can tap into.
• 31:22
  William Auten: Uh you'll have to get your deductible, pay your deductible, um, but that's just the way life goes sometimes.
• 31:28
  William Auten: So now what might happen is that your insurance carrier may contact that tenant and tell them, hey, we had to pay $74,262.38 here, and we would like you to write us a check to reimburse us for that.
• 31:45
  William Auten: And the tenant calls his insurance company and says, Hey, they're coming after me for this money.
• 31:51
  William Auten: Um, my liability policy, pick it up.
• 31:54
  William Auten: And chances are it won't.
• 31:56
  William Auten: And the reason is the there's an exclusion for um property in your care custody and control.
• 32:03
  William Auten: And if you're renting the property, um, probably not going to be coverage for um water damage from uh freezing.
• 32:11
  William Auten: Now, if you have coverage for fire legal liability, that'll pay for fire damage to the uh building if you start a fire, but which we are not recommending, by the way.
• 32:22
  William Auten: Starting a fire or having fire legal liability coverage?
• 32:27
  Chantal Roberts: Starting a fire to defrost everything, not recommending that at all.
• 32:32
  William Auten: Right, right.
• 32:32
  William Auten: Yeah.
• 32:33
  William Auten: So um, but nonetheless, um, you might be uh you might not have coverage for the liability part of that.
• 32:42
  William Auten: Now, to what extent they actually pursue that legally, uh, you know, it depends on the amount of the claim and and all that.
• 32:49
  William Auten: But um, that's my perspective on that.
• 32:52
  Chantal Roberts: Yeah.
• 32:52
  Chantal Roberts: I just got a and this is what I was working on before we started the podcast.
• 32:58
  Chantal Roberts: I just got an and uh question um from the big eye as one of their ask the experts, where the insured is a tenant, and I don't actually remember what necessarily happened, but uh it was a question about whether the tenant has an insurable interest in the leased space.
• 33:23
  Chantal Roberts: And and I would argue that they do, but the agent was saying there weren't any insurance companies that were giving this tenant property damage coverage.
• 33:38
  William Auten: Yeah, you wouldn't have you wouldn't have a line item for coverage on that, more than likely.
• 33:43
  Chantal Roberts: Um but you do if the if the lease, I would argue that you do, if the lease makes you responsible, which most leases do, make you as the tenant responsible for the building.
• 33:56
  William Auten: Well, for betterments and improvements, um you would have coverage for those items that you as the tenant installed in the building.
• 34:06
  William Auten: Um, but the stuff that was already there before you arrived, that's I believe that would be excluded.
• 34:14
  William Auten: Well, then it would certainly be excluded from your property coverage.
• 34:18
  William Auten: When I talk about betterments and improvements, that's actually afforded under the business personal property section.
• 34:23
  William Auten: So it's not a liability coverage, that's actually a first party coverage.
• 34:27
  Chantal Roberts: Yeah, I'm sorry, I switched topics on us.
• 34:29
  William Auten: Yeah.
• 34:30
  William Auten: That's how I lose my hair when you switch up bulletcats.
• 34:33
  Chantal Roberts: I'm sorry, I'm sorry.
• 34:34
  Chantal Roberts: I just, it's like squirrel, and I'm off on another tangent.
• 34:39
  Chantal Roberts: But that's uh a current topic that I'm I'm thinking about right now.
• 34:45
  Chantal Roberts: Although we still we always argued that there was some kind of insurable interest when the contract is, if I recall correctly, doesn't the liability policy the the commercial liability policies take into effect?
• 35:02
  Chantal Roberts: And I had to look at I'm I was in the process of looking it up, uh take into confect uh take into consideration, I guess I should say, the contracts that you have signed and the responsibilities that you have signed.
• 35:20
  William Auten: Well the contractual liability portion of it, um I I don't think that supersedes any exclusion, and I don't think it supersedes the care custody control exclusion, and I believe that exclusion I can't recite it, unfortunately.
• 35:42
  William Auten: I can't either.
• 35:43
  William Auten: That's I have a setting up.
• 35:44
  William Auten: Um but I think it has language in there about property that you rent.
• 35:49
  Chantal Roberts: Okay.
• 35:50
  William Auten: Or lease.
• 35:51
  Chantal Roberts: I still have to look it up, but hey, if you know the answer, be sure to drop it in the comments and let us know, tag us on LinkedIn or something like that, and go, you guys are a bunch of idiots.
• 36:02
  William Auten: So what I yeah, I would love to hear that.
• 36:04
  William Auten: I I hear that every day from other people.
• 36:06
  Chantal Roberts: But we want to hear it from other people.
• 36:08
  William Auten: We want to hear it from a whole batch of new people.
• 36:10
  Chantal Roberts: Just a whole bunch of people.
• 36:11
  Chantal Roberts: Just let us know and be sure to like share this episode with other people and go, look at these idiots.
• 36:17
  Chantal Roberts: I mean, why are we listening to them?
• 36:19
  Chantal Roberts: Or moreover, listen to these guys.
• 36:22
  Chantal Roberts: It's comedic effect because these guys are a bunch of idiots.
• 36:24
  Chantal Roberts: So either way, we get a lot more subscribers that way, and I'm all about it.
• 36:29
  William Auten: I want to know though, I and I've not really looked into this um in detail.
• 36:34
  William Auten: I've had claims where we insure an apartment building or or a rental property of some uh residential sort, and a personal tenant is uh is living in there and they cause damage uh by allowing the pipes to freeze because they turned the heat off or didn't pay their bill or whatever.
• 36:57
  William Auten: And I I don't remember, and I don't remember because I've never really seen a carrier pursue that tenant.
• 37:04
  William Auten: You know, if you've got a tenant living in an $800 or $1,000 a month apartment, chances are they're not gonna have the assets to pay for, they might have insurance coverage, whether or not it would protect them in yeah, maybe they do.
• 37:20
  William Auten: Um what is what does the H04 say about it?
• 37:25
  Chantal Roberts: Okay, so I have an answer.
• 37:28
  Chantal Roberts: It might not be the answer.
• 37:31
  Chantal Roberts: So we had looked into this uh and it started off coming with is an apartment vacant or is it unoccupied when we were looking for property damage, and most of the time it came back to being unoccupied rather than vacant.
• 37:57
  Chantal Roberts: Now that's a whole again, whole different podcast.
• 38:00
  Chantal Roberts: But the the point is one of the things that we learned when I was a claims adjuster way back when is that a lot of states will say if the landlord uses the rent to pay for property insurance coverage, then we really can't pursue the tenant as someone who's at fault.
• 38:32
  Chantal Roberts: They it wasn't like the legislation was saying that the tenant is an additional insured, but it was kind of saying the tenant was an additional insured.
• 38:45
  Chantal Roberts: I mean, it just didn't come right out and say, and and and I'm specifically thinking of of Oklahoma.
• 38:51
  Chantal Roberts: I know Oklahoma has a rule like this that if the insured uses their rent money to pay for the property insurance, we can't pursue that tenant who may have caused the damage.
• 39:07
  Chantal Roberts: Now, I I'm sure we could pursue that tenant's insurance if they had it, like the H04, but them themselves, if they don't have it, that is what Oklahoma says no to.
• 39:25
  William Auten: Interesting.
• 39:26
  Chantal Roberts: Yeah.
• 39:28
  William Auten: Well, um I am I'm looking at an H04, the liability section here, and uh there's a lot to a lot to absorb here.
• 39:39
  William Auten: So I'm not gonna uh render an opinion on on whether or not a renter's policy or an HO4 would cover a negligent tenant if they allowed the pipes to freeze.
• 39:51
  William Auten: Um my guess is that it might.
• 39:55
  William Auten: So I would but I don't know.
• 39:58
  William Auten: I don't know that there's a similar exclusion as to um that would be under the commercial policy.
• 40:03
  William Auten: That's why.
• 40:04
  Chantal Roberts: Yeah.
• 40:04
  Chantal Roberts: Um, so I would say that we've we've kind of beaten this to a pulp, yes?
• 40:11
  Chantal Roberts: Yes, we've it's a it's a wrap.
• 40:14
  William Auten: Beaten the icicles out of it.
• 40:15
  Chantal Roberts: Yes.
• 40:16
  Chantal Roberts: The it sounds easy, it sounds simple.
• 40:20
  Chantal Roberts: We gotta remember that freeze, freezing whatever conditions are a covered property or a covered cause of loss.
• 40:31
  Chantal Roberts: Yes.
• 40:31
  Chantal Roberts: And so if a pipe froze, that pipe may also be covered.
• 40:38
  Chantal Roberts: So we gotta remember that in addition to the ensuing losses.
• 40:41
  Chantal Roberts: Right.
• 40:42
  Chantal Roberts: But in the summer, when we have an accidental damage or burst or whatever, that's when the pipe has been like worn out.
• 40:52
  William Auten: Yeah, compromise the corrosion or so now if it's impacted by something, like uh somebody drives a nail through the wall and it hits the pipe, and and um that's that would be covered.
• 41:03
  William Auten: That would be covered.
• 41:04
  William Auten: That's not uh well, it is accidental discharge.
• 41:08
  William Auten: So I gotta do that.
• 41:10
  Chantal Roberts: But what is the cause?
• 41:10
  Chantal Roberts: What is the direct cause of loss?
• 41:13
  Chantal Roberts: The direct cause of loss would be the nail, and if it's not excluded, it would be covered if we're using an HO or excuse me, a CP 1030, a special form causes of loss, right?
• 41:24
  Chantal Roberts: Regardless, we would be pursuing the nailer for subrogation, right?
• 41:32
  Chantal Roberts: Yeah.
• 41:34
  William Auten: Unless it's a tenant, then it's probably well, you still could pursue anyway.
• 41:38
  Chantal Roberts: Yeah, anyway.
• 41:38
  Chantal Roberts: See, we we're gonna get back into the like spiral again.
• 41:42
  William Auten: And right so next it always takes me back to the forms, though.
• 41:46
  William Auten: Whenever we whenever we get into these little questions, I'm over here on Google looking up the the policy form which is which is trying to put a good trying to do a coverage analysis while we're both talking at the same time.
• 41:58
  Chantal Roberts: So super hard, which is a good point, though, because everything is driven by the policy, right?
• 42:05
  Chantal Roberts: And and so as an adjuster, that's again, that's exactly what you have to know.
• 42:09
  Chantal Roberts: Also, what you have to know is our next episode will be uh uh airing on April 9th.
• 42:17
  Chantal Roberts: It is going to be about spring storms and property claims.
• 42:20
  Chantal Roberts: Woo! Yes, all the thunder and lightning, very, very frightening.
• 42:24
  William Auten: Lots of wind.
• 42:26
  Chantal Roberts: Mm-hmm.
• 42:26
  Chantal Roberts: Yep, lots of wind.
• 42:29
  William Auten: Maybe some hail.
• 42:30
  Chantal Roberts: Oh, lots of hail.
• 42:32
  Chantal Roberts: We actually had some hail uh here in Kansas recently.
• 42:35
  William Auten: Oh, yeah.
• 42:36
  William Auten: I um uh one of uh one of the cat adjusters that was helping out here had uh mentioned that and and got in his truck and took off.
• 42:46
  William Auten: So he he's he's out there doing hail claims now.
• 42:50
  Chantal Roberts: I am thinking about putting a note on my front door saying, Dear roofing salespeople, we're both adjusters, our roof is fine because everyone who's getting a new roof around here, they have all of their all the insurance or all the roofing companies send their salespeople around to knock on doors and say, let us take a look at your roof.
• 43:09
  Chantal Roberts: No, no, we're good.
• 43:12
  Chantal Roberts: Yeah, we're good, we're adjusters, we're good.
• 43:15
  Chantal Roberts: And then they slowly back away from us in fear, which is fun.
• 43:21
  William Auten: Yeah, so that wraps up uh another fun episode, right?
• 43:26
  Chantal Roberts: Absolutely, yeah.
• 43:26
  Chantal Roberts: So we will see you on April 9th.
• 43:30
  William Auten: April 9th.
• 43:31
  William Auten: Thanks.
• 43:31
  William Auten: Take care, we'll talk soon.
• 43:33
  Chantal Roberts: Okay, bye.
• 43:34
  unknown: Bye.
• 43:35
  William Auten: Thanks for joining us on the Art of Adjusting Podcast, where we talk about life as an insurance adjuster.
• 43:41
  William Auten: Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well.
• 43:45
  William Auten: For independent adjusting services, go to www.autin.claims.
• 43:50
  William Auten: And for anyone interested in working as an independent liability adjuster, go to the contact us tab to join our roster.
• 43:58
  Chantal Roberts: So this wraps up another.
• 43:59
  Chantal Roberts: Art of Adjusting podcast.
• 44:02
  Chantal Roberts: If you enjoyed this podcast or this episode, please give us five stars and a review.
• 44:07
  Chantal Roberts: It does help the algorithm pick us up.
• 44:10
  Chantal Roberts: In the meantime, you can contact me at theartofadjusting.com for consulting and training purposes.